Charity and Community Amateur Sports Club (CASC) Tax Relief changes: What charities need to know

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From 6 April 2026, changes have been introduced to the rules covering tainted donations, approved charitable investments and attributable income for charities and CASCs. These changes affect UK charities, CASCs, donors and those who advise or support them.

HM Revenue & Customs (HMRC) have implemented the changes with the aim is to simplify the existing rules, making them more consistent and reducing the risk of charitable tax reliefs being misused. For most charities and CASCs, the changes should not create major disruption. However, they do reinforce the importance of good governance, clear decision making and accurate record keeping.

Area	Old Rules (Before 6 April 2026)	New Rules (From 6 April 2026)
Tainted Charity Donations	A donation was “tainted” only if HMRC proved the main purpose was for the donor to gain a financial advantage.	HMRC will now look at the outcome of the arrangement. The threshold has moved from “financial advantage” to the broader term “financial assistance”, which means more arrangements could fall within the rules.
Approved Charitable Investments	There were 12 types of approved charitable investments, but only one was subject to a strict test requiring the investment to benefit the charity and not be used for tax avoidance.	All 12 approved investment types must now meet the “benefit to the charity / not for tax avoidance” test.
Legacies and Estate Gifts (Attributable Income)	Legacies were not treated as attributable income, so they were not subject to the same charitable purpose spending rules.	Legacies are now treated as attributable income. They must be applied for charitable purposes to remain tax-exempt.
Compliance and Sanctions	HMRC powers were mainly used in serious or exceptional cases, with most charities unaffected.	HMRC has stronger powers to intervene, including potential sanctions where charities or trustees repeatedly breach the rules while claiming reliefs.
Overall Rule Consistency	Different tests applied across donations, investments and income, which made the system complex.	The rules are now more consistent across donations, investments and income, with the aim of simplifying administration and preventing tax-avoidance structures.

For tainted donations, the key change is that HMRC will now focus on whether the donor, or someone connected to them, receives financial assistance from the arrangement, rather than looking mainly at the donor’s original motivation.

For approved charitable investments, charities and CASCs need to be able to show that each investment has been made for the benefit of the organisation and not for tax avoidance purposes. This test now applies across all 12 approved investment types.

For legacies, the rules now bring legacy income within the attributable income framework. This means legacy funds need to be used for charitable purposes to avoid a possible tax charge. HMRC guidance confirms there is no fixed deadline for spending legacy funds, but trustees still need to show that funds are managed and applied appropriately.

In practical terms, charities and CASCs should consider:

Whether any donor arrangements could result in financial assistance or benefit being received by the donor or a connected person.
Whether investment decisions are clearly documented and made for the benefit of the charity or CASC.
Whether legacy income is being recorded and applied for charitable purposes.
Whether trustees have enough oversight of donations, investments and restricted funds.
If bookkeeping and records are detailed enough to support decisions if HMRC asks questions.

The main message is the importance of strong records. Charities and CASCs should keep clear evidence of why decisions have been made, how funds have been used and how charitable purposes have been met.

Good bookkeeping is not only about meeting compliance requirements. It helps trustees understand the financial position of the organisation, make informed decisions and protect the charity or CASC from unnecessary risk.

If you are a trustee, charity manager or involved in running a CASC, now is a good time to review your records, investment decisions and legacy fund processes to ensure you adhere to the new rules going forward.

Our team is here to support you with clear, practical guidance on bookkeeping, accounts and tax compliance, helping you feel confident in meeting your responsibilities. If you would like us to review your records, talk through how these changes apply to your charity or CASC, or help strengthen your bookkeeping processes going forward, please get in touch. We will be happy to guide you through the next steps.

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